That is a very risky trade. If Mr. Hollande is successful in forcing the ECB to monetize State debt and set interest rates at a low level, the money to be made in French, Spanish, and Italian bonds could be enormous. It might be the time to go massively long on EU State bonds.

People can do whatever they like with their bonds, it's their decision and it depends on their belief or not whether the country appreciates their investing in it or regards them as profiteers to be milked. Other people will emigrate to where they can work and not be harrassed for doing so.

You've gotta be kidding me, well if Greece holds on then you can make like 25% interest a year on bonds. Even if Ireland or Portugal holds up you could make money at like 10% interest. Pretty damn risky though, goodness!

German-French spread is pretty wide already. A Hollande victory is priced in. Not a good trade at this point. Going long on the OAT might be a better option. I expect the newly elected president to promptly drop his campaign promises in the coming weeks and try to sound conciliatory towards Madame Merkel. That should push down the yield.

If he goes ahead with 75% income tax and estate taxes - and if those taxes are successfully enforced (France has a good record there) - France will probably wipe out its deficit.

By the sounds of it, he really does believe in fiscal sustainability - he just wants to pursue it without any sacrifice of living standards for the poor.

It's a toss of whether this is terribly successful; it's a toss up whether this has serious growth implications (positive or negative - social spending can have high returns if it builds infrastructure, eduction or human capital).

The 75% tax is supposed to be on incomes worth 1M€ or more (with the exception of actors and football players...). Hollande himself has said he didn't expect much revenue from it. So there is still a need for spending control.

At very least, Hollande isn't a slippery populist like Sarkozy - there'll be no expulsion of gypsies, and Hollande might have a better mandate/ higher sense of duty to force through unpopular pragmatic reforms where there is enough evidence of necessity (education? pensions? payroll?).

When socialists are under the influence rational policy analysis put together by a competent civil service, they sometimes have more freedom to force through unpopular things that seem obviously necessary (like pension reform, subsidy cuts, privatisations). Unions tend to be more reticent when their own side swings the axe.

Money is a serious affair. Base your decisions on fact. First check out whether governments with socialists increased sovereign debt compared to conservative governments. You may be surprised. (Socialist governments are less bothered by the left-wing press).

A quite well-assessed comment of the situation by the blogger. Giving an accurate account of the complex reality of French politics is a highly delicate exercize for a journalist, especially when writing against the conventional wisdom.
I believe this French presidential campaign will be rated for its most extraordinary aspects, in particular for the amount of hostility that was levelled at the sitting incumbent, and towards his electorate. The exact numbers of the polls are not out yet but at this time here is a 4 point gap. That seems to represent a good performance by François Hollande, and certainly a performance by Nicolas Sarkozy which is not only too short to claim re-election, as his very swift concession speech has shown, but also appears as an indictment of his mandate and of those who supported it. At this time it is difficult to give greater explanation of why these numbers occurred, whether it represents a vote against the person of Nicolas Sarkozy or a vote against the accomplishments of his five year term. François Fillon, the now outgoing Prime Minister, has remarked that in time a historical vindication, rather than the media and partisan indictment, would give a better account of those five years.
Sarkozy cannot be faulted for doing his job, whatever is going to be levelled at him, because it is worth pointing out that some people have also waited the electoral defeat to level a number of judicial charges at him, fed by the different speculations that the extreme hostility to his person generated, not only during his presidential term, but also before. How the French judiciary treat this will be a good indication of its supposed independence from political fiat.
We will see in the next day what are the exact polling numbers. The participation has been very strong, which is a good thing in any case. It must also be said that how the new French government treats its foreign partners will matter greatly as to how worthy this government is. There are easy foreign conflicts to be sought out, in order to please some domestic constituencie; and there is a genuine wish to collaborate with foreign partners that could win out, should the right choices and right appointments be made witout regard to political orhtodoxy. The new President of France did not have my vote, nor does he have my trust at this hour. He will be judged on his behaviour, and that of those he appoints to govern alongside him. And that will also be the attitude of the world outside France.
It may be interesting to return to the cover story of The Economist "France in Denial" of a few weeks ago. There is a strong temptation to say that tonight's election result will validate this judgment, which the new President's supporters have done their utmost to suppress. In fact, only the acts of their champion, beyond an election won on the unpopularity of his predecessor, will confirm whether this judgment was in any way prophetic. I think most people who like France will hope it is not.

We need to have a united France especially because there are only 3 percent seperating Sarkozy and Hollande and this shows how much the country is divided. I hope that these results will speak to M.Hollande and that he will choose a more balanced approach to speak to the country. You would have to know how bad the media in France were against Sarkozy and how much this has influenced hate towards Sarkozy..I am not teaching anyone something new by saying that the media in France, apart from Le Figaro are essentially all left wing minded. Another crucial point I would like to stress: I agree that M.Sarkozy shouldn't have been so friendly with the extreme right and he has done some mistakes, by the way I belive in justice and i like some ideas of M. Hollande but I don't agree with raising the taxes and his idea of Europe . However I am quite surprised about all the hate that M.Hollande has towards the wealthy people who, from what I can see, are going to realise all his dreams with their money! maybe he should be nicer to them in his public appearances and be a bit more open minded because I can tell you most rich people won't stay in the country and will go overseas. There is no way that when you have the chance to have some money and you already pay exuberant taxes you're gonna accept for them to be raised, sorry M. Hollande! Finally, socialists would have voted for anyone against Sarkozy, even Dominique Strauss Kahn !

By rich I don't mean just billionaires :) I mean anyone who has the chance to have a good salary and maybe a house in the countryside for their family to go on holidays. These people are gonna pay for having done well financially which is not fair. And even for very wealthy people, imagine you work your whole life on a project and you finally have the contract of your dreams with 1 million euros and then you have to give 75% of it to Hollande...Maybe 30% at the most would be ok but seriously? And it's not just that, he seriously said that he's gonna raise taxes on succession, on wealth etc. It is not looking good. The worse thing is that people don't get to choose for which project their money is going to. After all they worked hard to earn it so at least there should be a referendum to know where it's going.

Easy. You hop accross the border to Switzerland, Germany the rest of North / East /Central Europe is open for business.
It is better to take a cut on your assets in France by selling soonish than bleed slowly to death over years to come. You will find plenty of eager french takers who think they are making a killing off the evil rich by buying cheaply their ill-gotten wealth.

I think I'd keep my primary residence (and all my assets) in Switzerland or Monaco, and only spend 4 months a year at my French house.

As a "foreign resident" investor in France, or as a "foreign contractor" working for short periods in France, I would be exempt from French tax.

Not everybody is able to arrange their circumstances like that - but those who can soon will.

It isn't clear where on the laugher curve France is - there probably is room to raise a few tens of billions in additional revenue. It is a trade off between reduced inequality and the distortions that this will generate.

(If French welfare were as efficient as Scandinavian welfare - if it prioritised education over the military, and sought complete eradication of poverty, then higher social spending might pay for itself in higher economic growth.)

Many people think that Hollande will not be able to bring forth a strong economic plan. However given Europe's current economic mess, no leader is able to bring a economic plan without the ECB or neighboring leaders complaining. Hollande is a smart man who can make the right decisions for France. For now we must wait for the legislative elections for a clear picture of France's future.

Let's not forget that Angela Merkel is also facing a state election today. Her popularity could falter as well.

The world isn't worried about Merkel because the world isn't worried about Germany. The country has a low unemployment rate and is carrying the rest of the EU on her back. On the contrary, France has just replaced a so-so leader with a leader that has no experience governing. We are worried Hollande doesn't understand the economic realities facing France. They need either austerity to reduce the debt burden or pro-growth policies. Hollande has chosen a third option, more spending on things that will not create growth. We want the EU to be a success and France needs to be a large part of that! That's why we are worried.

He may be smart, but the smartest politicians are known for their ability to form a team. And look who's his closest economy adviser: Pierre Moscovici, a Revolutionary Communist League activist.
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I know, I know, he is a FORMER communist. Yeah, right. And leopard can change its spots.

I'm a citizen of France (and the US), and I'm not worried. Well I am worried about the rise of the FN, but I blame Sarkozy for that. As I stated in another reply, Hollande talks big on the economic issues but once faced with the facts he will probably make decisions that won't be popular with most of his supporters.

The FN will rise really BIG now, thanks exactly to the outcome of this election.
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Remember, Marine Le Pen voted blank in the run-off and practically advised her followers to do the same. UMP will face inevitable demise once Sarko has retired from the politics (it;s his very own party, like the FN is of Mme Le Pen)... and where do you think a huge chunks of the UMP supporters go?
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To Flamby's Counter-Revolutionary Socialist League? I think not.
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The right political space will be restructured, and the FN will play role simply unimaginable just a few years ago.

I going to laugh in 5 years when French people who elected Francois Hollande will realize that they elected the worst politican in our country.
The France that we know up to now will be gone. Francois Hollande is only going to bring the highest rate of immigration in Europe, gay marriage, and the economic crisis is going to get a lot worse.
Sarkozy was a great president, he had the love of his country, he saved the Euro, did a great job in Lybia. He wanted change
On the other hand Francois Hollande is still dreaming by proposing the retirement age at 60, and the 35 hour work week plan.. Poor France.

I agree with you I think socialists voted against Sarkozy just to prove a point... I think Hollande has no sense of economy what so ever if he thinks raising taxes to the point that people want to leave is the solution. It's not because you say the word "revolution" that you're the hero who saved France.

Sorry but you're wrong. While Hollande talks big on taxation, it will not be as extreme as he says. Immigration policy will stay the same, especially since the FN did so well, and there is nothing wrong with gay marriage (productive, tax paying citizens deserve equal rights).

Maybe you should learn about France, it's political history and laïcité before making such comment. France is not the US and never will be.

I think that what was meant here was that Hollande is great on the intellectual side of things like welcoming gay marriage which i think is great and be more opened towards culture and all that, but he certainly will not be able to deal with the economy crisis which is, at the moment anyway, a far bigger issue in our world! Raising taxes is the thing not to do in such a crisis,any expert would say that, it is just for Hollande a socialist reflex to hate the rich nothing more than that. I can tell you that France has incredibly high taxes already even when Sarkozy was there so it doesn't need more.

So what you're saying then is Hollande is basically lying. Either way, not a great start to a Presidency.
And it doesn't matter if he raises taxes as dramatically as he proposes. The mere fact of what he has stated he intends to do, plus his election, will send any intelligent person with means fleeing for the exits.

A real shocker would be a politician who didn't lie during the campaign season. Sarkozy talked big on immigration, the only real action was the language policy (speaking/comprehension of a 15 year old). He did it again with the terror in Toulouse and the rise of Marine le Pen.

Just review the all promises of Obama, Harper, Cameron, Merkel and more made during their campaigns and see if they followed through on ALL of them.

What I meant was that Hollande is going to be a threat for the french moral values but not only. He 's going to be very dangerous about immigration. I have been watching the news for the last two hours, and among the socialist crowd cheering Francois Hollande you can only see Algerian and Tunisian flags. And as a French citizen, I'm worried for the identity of my country.
As for the economic crisis, under the 14 years of presidency of Francois Mitterand ( the latest socialist president), the public debt of France was multiplied by 8 after he had promised to increase the wages and decrease the working time.
But apparently there are still people voting for the socialist party in France. Absurd

you crying about immigration , i`ve seen a planty of french forigns in anothers countries , did you checked hong kong littley how many french moving there to work . the french and the brits are the most hyporciate people in the world , they have the right to move to any country they want . " the "persian " golf is full of british . dubai etc .. etc... / . the french is moving to america . australia . germany , ,,,,,... ,
i`m allso against poor immigration policy , but if the french has the right to work in dubai , allso the african has the right to work in france , win-win sitution

I'm not against gay marriage. People, gay or not, should have the right to get married.
However, I think that as soon as France will give the right to get married for gay people, the gay lobbies are going to ask for the right of adoption by gay people. And I am strongly against it because i think a child needs a father and a mother to grow up in the best conditions.
But it is my personal opinion on this issue and i respect opposite opinions.
As for immigration, I'm sure you would understand if I say that I'm shocked by seeing immigrants burning French flags, booing the national anthem, tearing French flag and replacing it by their country's flag. I only think people should have more respect for their welcoming country all the more when they get money from the french government.
And currently I think France hasn't the capacities to welcome immigrants in reasonable conditions with a 10% rate of unemployment

Fine, we disagree. I think a lot of heterosexual couples fail miserably at raising their kids, I really don't believe it has very much to do with the parent's sex.

I also don't believe that sexuality is a black and white thing. I'm sure lots of "heterosexual" couples contain a partner who's bisexual, for instance. Also, I think that a person's sexuality can change during the course of their lifetime.

To me, parenting is about being loving and responsible and trying to give your child a chance of succeeding in life. The gay friends I have, I deem more than fit to handle that task.

That's my personal opinion. Regarding immigration, I don't like seeing flag-burning, etc. either. But I think it's really important to look at things in the perspective: Do all immigrants to france burn flags? No, of course not. Of course there are problems, and I agree that immigration probably works best if it is regulated and happens at the right pace.

I just think these arguments too easily turn into sweeping generalisations. With globalisation and the rise of Asia on the global scene, one day it might be us who would do anything to be allowed into a foreign country...

I agree that some homosexual couples could raise their kids better than heterosexual couples.
However I think family is one of the last institutions of our society, which teeters on the brink to collapsing. We should protect the family which is the first place where a child builds his personality, learns moral values, is given an education..
Don't you think it could be quite disturbing for a child to have two mothers or two dads ?
Let me also add that each parent has a really important role in the family, the role of the mother is to be protective, give love, looking after the children. She is the one with whom a child feels secure and understood. Whereas the role of the father stands for the authority, love, strength, family's chief :every child admire his father.
Ok it's a bit stereotypical but what I mean is that a mother and a father have a very precise role in the family that you cannot remove.
As for immigration, a small part doesn't mean that we should let it act as it wants.
I agree that ,one day, we might also immigrate to a foreign country and want to be integrated. But I was more talking about the cultures.
I think the prime issue in France is that our immigration comes Muslim countries where the culture is the opposite from ours. Thus the integration and assimilation of the immigrants is made really tough because of the unfailing clash between the two cultures.. Simple observation

People have always been saying society as we know it is on the brink of collapsing, especially when faced with some new development. Used to be that society would collapse if women got the vote, then it was if black people got the vote, etc. When people reach a certain age, they get nostalgic for a past which has never really existed.

I don't think marriage is what holds society together. People treating each other right and engaging with each other is what holds society together. Furthermore, I think our society is quite healthy. Probably more so than in the past.

Marriage is threatened (if that's how you see it) mainly by heterosexual couples who get divorced. I don't care, I think it's far better than back in the day, when women couldn't get a divorce from their husband. I don't idolize marriage, I think it's a somewhat outdated arrangement of mainly judicial importance. But I'm glad that (some) people have the right to get married, if that is what they want.

Mothers and fathers may complement each other in their roles, but in the modern world, the strong manly father and the sensitive loving mother, just don't hold up. Sure it's like that in some families, but it's the opposite in many others. And I know that gays or lesbians could complement each other just as well. Recently, a young man brought up by his two lesbian moms visited The Daily Show. He'd written a book about how well his parents had raised him, and what they had taught him about life. I'm telling you, this guy was 20, and a major asset to society.

Many kids grow up without parents, or with only one parent. We have here a minority (gays and lesbians) who want to marry and raise children in a loving way. And we see that as a threat to marriage and the wellbeing of children?!? I find that absurd.

Regarding the "clash of civilizations", that is also a very tired argument from the rightwing. Yes, there are problems and challenges, when cultures meet, but the solution is never to stop cultures meeting. We can't all board up our borders and live 100% homogenically for all time. We have to mix.

Besides, the anti-gay sentiments on the right wing fall very well in step with the anti-gay sentiments amongst islamists...

I think you raised good arguments about adoption by gay couples. I have to admit that it's quite convincing, :) however I still strongly believe that family should be kept in the way it always has been :with a father and a mother. You cannot disagree if I say that a child needs a mother for an emotional security and a father for the protection and physical security. And however will the society change, these patterns will stay the same. They haven't change since the beginning of our society , why should they now ?
Do you know the name of the book you talked about? It's always interesting to learn about opposite opinions!!

Don't misunderstand me about immigration. I wasn't saying that we only need a 100% "pure blood" in every country. Multiculturalism is a need and a wealth in our society but only if it works well. Immigration in France hasn't been controlled properly and that's why we have now some many problems among the different foreign communities. Nobody can't deny it. Even Angela Merkel acknowledged that the german multiculturalist pattern had failed in Germany ( And it think it can be shared to the rest of Europe)

What the governments should do now , at least until the end of the economic crisis , is to slow down immigration so that we can then welcome immigrants in better conditions (better education, assistance,..) which will lead to a better assimilation in the country. But as we know immigration is a taboo in France, nobody dares to talk about it and tell the people about the real problems , as the politicians are frightened to be seen as racists. We should acknowledge that the immigration pattern has failed in France and in other many countries because all the cultures cannot be well mixed together. it's not being racist to say that, it's only a fact that some cultures are to different from the others because of the opinions, the religions and the customs..

Thank you for being so open minded. I still think that gay parents can fulfill the same roles that straight parents fulfill, but I guess we just disagree, fair enough. The book in question is "My Two Moms" by Zach Wahls:

I agree with you that immigration must happen in a sensible way, and be manageable, and that there are definitely problems which must be debated openly and adressed. But I don't believe that different cultures are incompatible, I just think it takes more time than we expect, because we want things to go so fast these days. All the more reason for a sensible pace of immigration, like you said.

Oh, so you're a Girondist! Remember what led to their party's downfall during the glorious revolution? Yes, right: inflation, soaring prices... and the arrest and execution of 21 prominent members of the Girondist party.
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Beware of the victors!

Local issues like work weeks and tax rates in France, etc.. are best ignored by those outside of France, because they affect only the French. What really matters is the Eurozone. Over the last 3 years, the Eurozone has been in a slow motion recessionary train wreck that is ultimately caused by incomplete Federal unification. Mr. Hollande has promised to tear up the fiscal austerity pact, and to force the ECB to monetize State debt across the Eurozone. This will bring the fundamental issues to the fore, and force the Germans to make a quick decision to either commit themselves to the full unification of Europe as a single country, or alternatively to dissolve the Eurozone completely. The founder of the EU, Jacques Delours, had a vision of Europe as a world ruling superpower more potent than the USA and USSR combined. Mr. Hollande will put the decision as to whether the Delours vision will be realized or dashed forever in fast-forward mode. 2012 will prove to be a very decisive year.

As someone who deeply cares about Europe's future, I'm deeply pessimistic about a president Hollande. I hope the French left falls into its senses and promotes a sensible economic program. If not (what I think it's most likely) France's decline will be accelerated. I hope we don't have to come up with a way to insert an F in PIIGS...

I'm glad that Sarkozy is gone. He's such an opportunistic hypocrite, talking about "bad immigrants". He himself is a third-generation immigrant, isn't he? How Cro-Magnon-French is he really? LOL So why was he talking like Le Pen (Marine is a lot better looking than him anyway!)

Surely MORE socialism will help France and Europe get out of their economic mess, right? And an individual who designed a '35-hour work week plan' would make a formidable prime minister, right? Good luck, France!

Bling bling buffoonish pretender is gone. Let us hope that the Socialist will surprise everyone and have more economic sense and more pragmatic honesty than the supposed "conservative" ever dreamed to have.

I was no fan of Sarkozy, and I am in some ways happy to see him go, but I am afraid of what is now awaiting France. Hollande has shown no sign that he has even the most fundamental notions of what it will take to reinvigorate France and make it a successful 21st century nation. On the contrary his entire programme seems to be based on a return to the 70s.

As one of the many, many French young people who have felt obliged to leave the country in search of opportunity, I sadly see no immediate prospect of returning to the place I love.

In this blog our Paris bureau chief reports and comments on the race for the French presidency. The blog is named after the official residence of the French president, an 18th-century palace in the 8th arrondissement of Paris. Our election coverage is collected here.